HOMBRE MUERTO NORTH LITHIUM PROJECT

Located in Salta and Catamarca Provinces, Argentina. The property package of 3,287 hectares is comprised of the Alba Sabrina, Tramo, Natalia Maria, Gaston Enrique, Viamonte and Norma Edit concessions, all located in the Salar del Hombre Muerto in northwestern Argentina.

The Company has evaluated the Hombre Meurto North Lithium Project (HMN Li Project) having completed the initial exploration, a resource calculation, and releasing PEA numbers. The HMN Li Project is strategically located in the Hombre Muerto Salar, an area of active lithium production by FMC Lithium Co. at the Fenix lithium mine, some 12 kilometers south of the project area. The project is surrounded by ground now owned by POSCO, a Korean based lithium producer, as a result of its US$280 million purchase of the area from Galaxy Resources Ltd., an Australian-based producer. Galaxy Resources Ltd., is also moving their portion of the Hombre Muerto Salar, the Sal de Vida Project, to lithium production.

Highlights of the Hombre Muerto North Lithium Project include:

• Test work is underway for Direct Lithium Extraction (DLE) - an alternative to the conventional evaporation process currently used by the industry - and the process under development is demonstrating a doubling of Lithium Recovery from Brine (80% lithium recovery) which potentially will shorten lithium recovery time and provide higher recovery of lithium.
• PEA indicates attractive economics for a 5,000 tonne/year LCE operation with a CAPEX of $93.3M, OPEX of $3,112/t LCE, NPV(8) of $217M and IRR of 28.0%.
• Exceptional Li Samples; 300 - 400 meter average 918 mg/l Li with a low Mg to Li ratio.
• Excellent Pump Test Results - produced 26 liters per second of lithium brine in 72-hours.
• Geophysical data indicates zones of low resistivity, interpreted to be potential lithium-bearing zones that are open at depth.
• Adjacent to Galaxy Resources’ Sal de Vida lithium development project sold in May 2018 to Posco for US$ 280 Million.
• Highly qualified, Argentina-based team of professionals experienced with lithium exploration, development, through to lithium production.

NRG-43-101 PEA TECHNICAL REPORT

Quotes taken from previous New Releases...

March 17, 2021 - Adrian Hobkirk, President and CEO of Lithium South, quoted,

" I personally feel very optimistic that DLE’s efficiencies will replace conventional Lithium extraction methods which are slow as they’re dependent upon extracting lithium from ponds via a solar evaporation process."

February 20, 2020 - Adrian Hobkirk, President and CEO of Lithium South, quoted,

"Lithium South is evaluating several new extraction technologies for lithium production which may be applicable to the project, all of which will require a substantial sample of brine."

August 12, 2019 - Adrian Hobkirk, President and CEO of Lithium South, quoted,

“We are very pleased to have completed and filed the report, which firmly established the Hombre Muerto North Lithium Project as having significant potential. The smaller environmental footprint, shortened build out time and excellent grade of lithium enhance the attractiveness of the project.”

April 29, 2019 - Adrian Hobkirk, President and CEO of Lithium South, commented,

“Lithium South has advanced the HMN Project from discovery to PEA in just under twelve months. The PEA results highlight attractive economics associated with the project, including a smaller environmental footprint and manageable CAPEX. We look forward to taking the HMN Lithium Project to the next stage of development as quickly as possible.”

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HMN Li Project

HOMBRE MUERTO NORTH LITHIUM PROJECT

LITHIUM SOUTH – HMN LITHIUM PROJECT

HOMBRE MUERTO NORTH LITHIUM PROJECT

HMN LI PROJECT – BULK BRINE SAMPLE

HMN LI PROJECT – BULK BRINE SAMPLE

HMN LI PROJECT – BULK BRINE SAMPLE

Project Timeline

March 2021 - Doubling of Lithium Recovery from Brine using DLE

Direct Lithium Extraction (DLE) test work was completed by Chengdu Chemphys Chemical Industry Ltd. (Chemphys) utilizing its proprietary XFP-Lithium DLE process, which selectively extracts lithium ions from brine. Testing was performed at the Chemphys ISO certified facility in Chengdu, China. Independent check sampling was completed at the PONY Testing International Group Co Ltd., an ISO/IEC 17020 and ISO/IEC 17025 certified laboratory. All work was completed under the supervision of Don Hains of Hains Technology Associates of Toronto, Canada, who is acting as the Qualified Person.

TEST RESULT HIGHLIGHTS

• 80% lithium recovery from brine using Chemphys XFP-Lithium Direct Lithium Extraction (DLE) process
• Near doubling of lithium recovery rates from conventional evaporation extraction
• Bulk brine sample acquisition for pilot scale test work

Adrian Hobkirk, President and CEO of Lithium South, commented,"Lithium South is well funded and has the resources to achieve its objectives. Our strategy is to pursue both DLE and evaporation extraction technologies in tandem, so that the risk is minimized."

Feburary 2020 - Lithium South’s neighbor at the project area, POSCO is moving forward with the production of lithium

A recent site visit by a representative of the Company confirmed that international corporation POSCO, Lithium South’s neighbor at the project area, is moving forward with the construction of a pilot facility for the production of lithium. POSCO acquired their ground in 2019 from Galaxy Resources Ltd. for $US 280 million.

April 29, 2019 - Positive Results from HMN Lithium Project PEA

HIGHLIGHTS

• US$217 million (Cdn$290 million) after-tax Net Present Value at 8% discount rate and Internal Rate of Return of 28.0%;
• PEA based on a production rate of 5,000 tonnes of lithium carbonate per year;
• Processing based on simple and proven solar evaporation technology;
• Expected mine life of 30 years with a 3 year ramp up period starting 2021;
• Fully loaded operating cost of US$3,122 per tonne of lithium carbonate;
• Total capital expenditure of US$93 million

Adrian Hobkirk, President and CEO of Lithium South, commented,“The PEA results highlight attractive economics associated with the project, including a smaller environmental footprint and manageable CAPEX. We look forward to taking the HMN Lithium Project to the next stage of development as quickly as possible.”

October 3, 2018 - High lithium grades for measured

Table 1. Hombre Muerto North Lithium Brine Resource Statement

HIGHLIGHTS

• 756 parts per million Li contained within 571,000 tonnes in the Measured Indicated Categories
• Low magnesium to lithium ratio of 2.6 to 1.0
• Second well pumps at 20 liters per second limited only by pump size

Adrian Hobkirk, President and CEO of Lithium South, commented,“the grades we are seeing at the Hombre Muerto Project are some of the highest reported grades for any of the lithium-bearing brine deposits in Argentina. The combination of high grades, excellent chemistry and good pumping rates are very positive indicators that we hope will allow us to advance the project through feasibility studies to production should the economic viability and technical feasibility of the project be established.”

October 2, 2018 - Maiden Measured and Indicated Resource of 571,000 tonnes LCE

Table 1. Hombre Muerto North Lithium Brine Resource Statement

HIGHLIGHTS

The NI 43-101 resource statement, detailed in Table 1, includes 509,000 tonnes (metric tons) of lithium carbonate (Li₂CO₃) equivalent (LCE) and 1,609,000 tonnes of potash (KCl) equivalent in the Measured and Indicated Resource categories, with an additional 62,000 tonnes of LCE and 231,000 tonnes KCl in the Indicated Resource category.

Adrian Hobkirk, President and CEO of Lithium South, commented,“we are very excited to see a robust and high-grade 43-101 resource estimate from our hydrogeological consultants. The Company now has a high-quality defined resource estimate with positive chemical characteristics that will hopefully allow us to advance the project through feasibility studies to production should the economic viability and technical feasibility of the project be established.”

September 21, 2018 - Lithium South announces the completion of a second pumping well

August, 23 2018 - Results for second drill hole up to 280 meters

HIGHLIGHTS

• Lithium South’s second drill hole at the Hombre Muerto North project has been completed to a depth of 280.8 m, and the sample results demonstrate that excellent lithium values are present in the lower portion of the hole.
• Based on these encouraging results, as well as the excellent results from the pumping well located approximately 2.1 kilometers to the east, Lithium South has decided to drill a second pumping well adjacent to the second core hole. The target depth of this hole is 400 m.

August 2018 - Lithium well pump test - significant capacity

NRG Metals completed a 72-hour pumping test that produced 26 liters per second of brine.

July 10, 2018 - Initial results for second drill hole up to depth of 61.5 meters

HIGHLIGHTS

• Initial sample results for the second core hole indicate excellent lithium values with very low Mg/Li ratios. The arithmetic average of three samples taken to a depth of 61.5 m is 719 mg/l lithium with a magnesium to lithium ratio ranging from 2.1 to 3.3.

Adrian Hobkirk, CEO of Lithium South commented, “We are encouraged to find high lithium grades in the first part of the second hole, and these results demonstrate the presence of lithium bearing brine across our Tramo property. We will have a more complete picture once this hole is completed and when we have the results of the pumping test from the large diameter hole completed adjacent to the first core hole.”

June 29, 2018 - Complete results for first drill hole from 300 - 400 meters

HIGHLIGHTS

• Brine samples collected from 300 to 401 meters (m) show high grade values very similar to the assays previously reported for the samples from surface to a depth of 300 m, with an arithmetic average918 mg/l lithium and a low magnesium to lithium ratio.
• The arithmetic average lithium concentration for all of the samples from the surface to a depth of 401 m is 900 mg/l, with a relatively low magnesium to lithium ratio of 3.0 to 1.0.

June 14, 2018 - Drilling continues to intersect high-grade brine from 100 - 300 meters

HIGHLIGHTS

• Brine samples collected from 100 - 300 meters show high grade values very similar to the assays for the samples from surface to a depth of 100 meters, with anaverage 888 mg/l Li and a low Mg to Li ratio.
• The hole has been completed to a depth of 401 meters.
• Adjacent rotary drill hole for pump testing has been completed to a depth of 393 meters.
• Drilling has commenced on a second diamond core hole approximately 2.1 kilometers to the east of the first hole.

May 24, 2018 - Consistent high-grade brine intercepts over the first 100 meters of drilling

HIGHLIGHTS

• Brine samples collected over the first 100 meters average 905 mg/l Li with a low Mg to Li ratio.

• The hole is now at 300.5 meters in clastic sediments, and brine samples are currently being collected from 300 to 100 meters. Drilling will resume after the sampling is completed.

• Adjacent rotary drill hole for pump testing is at a depth of 173 meters.

May 14, 2018 - Lithium South adds second drill onsite

NRG has mobilized a rotary drill to the Hombre Muerto North Lithium project to complement the diamond drill already at site. The rotary hole, which is located 15 meters east of the core hole currently underway, is to carry out pump testing. Drilling has reached a depth of 245 meters.

May 2018 - Drill rig operational and drilling is progressing as planned

The first diamond core hole has been advanced to a depth of 105 meters with a target depth of up to 350 meters. The geological profile observed so far in the core is that of sand, gravel, and clay, with a small halite zone, consistent with the expected geology. Brine was encountered from the top of the hole, and samples have been taken every ten meters from the current depth back to surface using a double packer unit.

April 2018 - Drilling equipment on site

Panoramic view - drill pad complete, drill rig on site and drilling staging underway.

April 2018 - Newly constructed road to drill pad.

Panoramic view - road construction out to drill location is now complete. Next step is establishing the drill pad.

March/April 2018 - Drilling pad construction

Road and drill pad construction has recently begun at HMN by OneBorax a local heavy equipment contractor. The map shows the access roads (green lines) to the two wells in the Tramo Group Claim.

March/April 2018 - Road construction

The first road, located at the Tramo Claim Group has been constructed and work on the first drill pad is underway.

March 2018 - Installation of housing and buildings

A fifteen-person camp has been installed by Servicios Mineros, and includes insulated buildings, electrical generation and a fuel station supply. The Company has an experienced management team on site which includes a senior hydrologist and a senior geologist.

Feb 2018 - Hombre Muerto CEO visit

The Lithium South management team recently completed a site visit to the Hombre Muerto North Lithium Project in Argentina. This exciting project is located in one of the highest grade salars in Argentina where FMC has conducted lithium extraction operations for many years. Our technical team, including the President of Chemphys, Dr. Yi Hua Dai, inspected the site. Road access is excellent and we should be able to kick off our drill program in a timely manner.